Struck by the pandemic, Bombardier on Thursday announced the cut of 1,600 jobs, including 700 in Quebec, planning to phase out production of its Learjet business jets this year.
“Workforce reductions are always very difficult, and we regret seeing talented and dedicated employees leave the company for any reason,” said the president and CEO of the aircraft manufacturer, Eric Martel, in a statement issued together with the 2020 financial results. “But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic.”
Bombardier had already announced in June the elimination of 2,500 jobs. By the end of the year, the company expects its workforce to have some 13,000 employees.
Bombardier also announced it will end production of Learjet aircraft later this year, allowing the Company to focus on its more profitable Challenger and Global aircraft families and accelerate the expansion of its customer services business.
“With more than 3,000 aircraft delivered since its entry-into-service in 1963, the iconic Learjet aircraft has had a remarkable and lasting impact on business aviation. Passengers all over the world love to fly this exceptional aircraft and count on its unmatched performance and reliability. However, given the increasingly challenging market dynamics, we have made this difficult decision to end Learjet production,” explained Martel.
Bombardier will continue to fully support the Learjet fleet well into the future, and to this end, today launched the Learjet RACER remanufacturing program for Learjet 40 and Learjet 45 aircraft. RACER program includes a bundled set of enhancements, including interior and exterior components, new avionics, high-speed connectivity, engine enhancements, and improved aircraft maintenance costs. The RACER remanufacturing program will be offered exclusively through Bombardier’s service centre in Wichita, Kansas.
Overview 2020 Financial Performance
Revenues from Business Aircraft activities reached $5.6 billion in 2020, reflecting a 3% year-over-year improvement, driven by the ramp-up in Global 7500 deliveries, which reached a record 16 deliveries in the fourth quarter, partially offset by the significant impact of COVID-19 on other programs and services revenues.
Adjusted full-year EBITDA and adjusted EBIT(1) for continuing operations of $200 million and $(211) million, respectively, reflect the impact of the COVID-19 pandemic on deliveries and services, as well as a lower contribution of early Global 7500 units. Reported EBIT of $0.9 billion reflects the accounting gains on disposals of the CRJ and aerostructures businesses.
Fourth-quarter free cash flow generation from continuing operations before interest and taxes was $523 million. This was better than expected and notwithstanding a $160 million negative impact made in the quarter due to the winding down of the Company’s reverse factoring program. Full-year free cash flow usage from continuing operations was $1.9 billion, reflecting pandemic-related disruptions, and including corporate and interest expenses, which will be lower in 2021 given the expected debt paydown and restructuring actions announced today.